Modern payday lending was legalized in Rhode Island in 2001 and didn’t cause too much outcry until the recession began adding to the number of local families falling deeper into debt and bankruptcy.

Now for the third consecutive year, a coalition of lawmakers, social-service organizations and religious leaders are trying to outlaw the interest that payday lenders charge, calling it onerous and predatory.

As they did the past two years, the coalition faces an uphill battle getting a bill, sponsored by Rep. Frank Ferri, D-Warwick, approved on Smith Hill. Similar bills have died without a floor vote in the past and neither House Speaker Gordon D. Fox, D-Providence, nor Senate President M. Teresa Paiva Weed, D-Newport, have signaled any change in their positions from last year.

But each year the coalition has added a few new members and focused additional scrutiny on payday lending in particular and short-term, distressed borrowing in general.

In response to the anger over payday lending, some Rhode Island organizations have launched their own nonprofit-oriented, short-term loan programs, including the Capital Good Fund, West Elmwood Housing Development Corp. and Navigant Credit Union.

But payday-lending companies say these alternatives are not truly accessible for the majority of people in the state facing an immediate cash crisis without good credit.

The real alternatives their customers would turn to, they say, include unregulated Internet lenders, credit cards, pawn brokers, neighborhood loan sharks, bank overdraft fees, check bouncing and missed monthly utility payments, all of which can come with higher costs than their products.

“The misunderstanding is folks fail to look at the broader marketplace and compare the characteristics of other products,” said Jamie Fulmer, senior vice president for public affairs at Advance America, the largest payday-lending company in the United States and Rhode Island.

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